Distributive policy

A new path for post-COVID policy

The public policy framework and public discourse are trapped in a technocratic mindset. In the post-covid world, it is not only public policies, but its entire framework that must be redesigned to make it more participatory.

This year, as we emerge from a parliamentary election phase in India, the worst of Covid-19 may finally be behind us. At this point, it is important to carefully consider the standards embedded in our governance and to do so with a sense of urgency as we move into an uncertain and changing world order. In this article, I would like to focus on the nature of policymaking, particularly in the context of the pandemic, and flesh out areas that need rethinking.

In the context of a specific event or duration, scholarly commentary frequently devolves into debates about the net failure or net success of an overall administrative effort. This is largely a rhetorical exercise, not an analytical one, and has characterized many comments in the wake of the pandemic. Although they spoke in a unique context, their views operated on the same analytical terrain. Yes, there are a range of variables at play between policy responses and their outcomes, especially given the threat of a rapidly mutating killer virus. But the “politics” in question here is itself a political category rooted in ideological assumptions. So simply advocating for governance reforms is hollow. It locks public discourse into a technocratic mindset while the setting itself demands reimagining.

For a fresh perspective, let’s look at the broader public health response through an unorthodox economic lens. Economist Richard Wagner offers a detailed insight into this. He points out that when faced with a complicated situation with multiple moving elements, political decisions are not rational but based on the intuitions of a few people at the top. This is called the “knowledge problem” – the problem that the government planning elite always operate with a severe knowledge deficit, because they cannot capture as “data” knowledge in constant evolution which is distributed in the mind of the whole population. . Because it is almost impossible to circumvent this problem, economists like Wagner make it their starting point of analysis. They do not make it a problem to be solved but a humble confession of the human condition.

A recent survey of officers of the Indian Administrative Service (IAS), India’s top bureaucrats, found that while most of them preferred participatory measures to tactics such as sanctions for enforcing the lockdown , nearly half thought compliance had more to do with the public’s fear of the law than anything else. This result reveals the tension between a “participatory” vision of governance and its detachment from everyday life. The administration must proceed by recognizing the complexity of reality, and not by acting in abstraction. To the extent that this is not the case, we are bound to get different flavors of the same thing, and ideological camps can contest them endlessly. Not surprisingly, substantial coercion often accompanies the solutions suggested by all sides.

Where does this lead us? Research on the subject has clear implications: (1) even in the case of infection, where individual behavior may have an externality on the public, one cannot assume that the government can solve this problem; (2) government experts are themselves housed in the system in which they operate; (3) accommodation measures reduce reality to very simplified versions; (4) the previous three highlight the need to rethink the fundamental assumptions of economic epidemiological models. To clarify these points, consider the oxygen crisis that occurred in India during the most severe phase of Covid-19. I chose this example for three reasons: (a) it was a deeply troubling phase that left an imprint on our collective psyche, (b) it is hopefully behind us (almost a year has passed elapsed), but close enough in memory to merit further discussion, and (c) it was an obviously complex phenomenon that cannot be reduced to a single case study or viewpoint.

At the height of the second wave of infection in India (April-May 2021), our healthcare facilities faced a severe shortage of medical oxygen, leading to widespread agony and anxiety among the public. The causes were multiple and ambiguous. Although the production, trade, storage and use of oxygen is privatized in India, only a dozen major suppliers in the country produce it. It is an essential but expensive drug. During the shortage, district hospitals, nursing homes and small and medium-sized hospitals lacked uninterrupted supply systems and sufficient storage. Some experts have criticized expensive private hospitals for not stocking up in advance to maximize their profits. Various aspects of supply fell under the purview of various entities, each operating under the constraints of its institutional incentives. In March 2020, an Empowered Bureaucratic Group II (EGII) was reconstituted to oversee the state allocation process. But regulatory action, rather than being altruistic, is shaped by competition between different lobbies. Thus, the EGII could not negotiate in time a consensus between the States on an adequate distribution. Towards the end of 2020, the Department of Pharmaceuticals as well as some state governments imposed price and supply restrictions on medical oxygen in response to increased demand.

Regulatory overload and demand pressures have had perverse effects on the market – hoarding by private groups and blockages by states prioritizing national needs. Some states have extended their territorial jurisdiction to private producers. It has even been reported that some have thwarted the Center’s efforts for small-scale production to continue sourcing from outside. Clearly, even if enough oxygen was produced domestically, a hampered supply chain was at the heart of the problem. The states that recorded the peak workloads were located far from those with robust production capacities. But it was soon argued that demand may also have been underestimated. To overcome the lack of transport and storage infrastructure, the government announced that it would import a large quantity of medical oxygen. Manufacturing licenses have been accelerated and private industrial manufacturers have been asked to divert their flows for medical purposes. Yet avoidable bottlenecks and bureaucratic delays persisted at various stages.

As research shows, decision-makers have no logical basis for prioritizing certain needs and services as essential over others. They can only anticipate changing circumstances when it is too late and often hamper an economy’s spontaneous mechanisms of adjustment. This is mainly because they compress distinct spatial lifestyles into a single dimension where many splintered economies come into conflict. The oxygen crisis has painted a grim picture for us. It spawned overwhelming disappointments with small, scattered pools of success. It showed us more than anything that politicians are only for animals of their own making. Although to very different degrees, we have also seen a similar pattern in other events, such as lockdowns and vaccination. A year later, there may be no magic wand. But we can use the burden of awareness to steer our thinking in a new direction.

Studies of planning laws and public governance have emphasized a pluralist paradigm for administrative systems. This means that policies must avoid universal categories in favor of sensitivity to difference. Even when there is no ‘crisis’, urban life is still enmeshed in diverse spaces, relationships, projects and beliefs. If each individual is considered an entrepreneurial actor, it makes sense to have an arrangement that has not one but several heterogeneous, competing and cooperating centers. When this complexity is removed from discussions of reform, politics, public welfare and planning, it not only fails to capture the real world, it also turns it into something to manage. Contrary to what the textbook may tell you, economics is not household management.


Thanks : The author wishes to thank the researchers of the FA Hayek program for the conceptual underpinnings of this piece, and Devika Dinesh, Tejashree Murugan and Vaishnavi Chandrasekar for their valuable suggestions.

On: Jayat Joshi is a Don Lavoie Scholar at the Mercatus Center at George Mason University and a Freedom Scholar with the South Asia Students for Liberty.